Taylor Review Reviewed

Recruitment industry responds to government report.

UK & Europe

The recruitment industry has been quick to respond to the publication of Good work: the Taylor review of modern working practices. Chief executive of the Recruitment & Employment Confederation Kevin Green says: "Agency workers play a vital role in our economy and have been central to the success of our jobs market in recent years. This review recognises the importance of flexibility to UK businesses and to the individuals who choose to work this way.

"Workers' rights aren't well understood, and we agree that employers need to engage more effectively with all workers regardless of what type of contract they are on. We also agree that more should be done to support workers who want to progress, and we're delighted to see the specific recommendation that the Apprenticeship Levy should be looked at again so that it works better for people in non-permanent roles.

"We have some questions about the recommendations, including that employers should be obliged to report on their use of agency workers, as its unclear how this would benefit individuals and could create unnecessary bureaucracy for businesses. However, overall we are pleased to see a balanced and thoughtful review which reflects the value of flexible work to the UK jobs market. The REC is ready to work with government to take these recommendations forward and advise on the impact they could have."

On the recommendation that 'gig workers' at organisations such as Deliveroo and Uber should be assigned 'dependent contractor' status, Green says:

"Gig workers should be given entitlements to holiday pay, pension provision and access to training, bringing them in line with agency workers who are already covered by a comprehensive regulatory framework. A new 'dependent contractor' category seems like a sensible proposal, which would help to identify legitimately self-employed workers."

Responding to the recommendations that Swedish Derogation should be repealed, and that the Employment Agency Standards Inspectorate (EASI) should police compliance with the Agency Worker Regulations (AWR), Green adds:

"Swedish Derogation provides agency workers with full employment rights, and was agreed by the government and all stakeholders including unions as part of negotiations in 2009 to implement the Agency Workers Directive. We are concerned that any attempt to amend the AWR may risk watering down the rights for individuals and would create uncertainty for business. We're keen to discuss ways to ensure compliance with the regulations, rather than reopening the debate about how AWD requirements are implemented into UK law. The underlying priority must be to ensure people can still work flexibly if they wish to, and that employers can continue to benefit from a vibrant temporary and contract market.”

Samantha Hurley, director of operations at APSCo gave the report a generally positive welcome particularly highlighting the concept of ‘good work for all’ and the Prime Minister’s support for enterprising small businesses.

The organisation also approves of the term ‘dependent contractors’, for those who are not employees, but are eligible for workers’ rights such as sick pay, holiday pay, minimum wage, and a new right to request fixed hours, with a free pre-employment tribunal process. In terms of protecting vulnerable workers, this is a sensible suggestion.

“We further welcome the fact that this report offers a clear differentiation between this group of workers and independent contractors who willingly choose to exchange traditional job security for flexibility and control,” says Hurley. “The fact that the ‘dependent contractors’ will be categorised according to whether individuals are under the supervision, direction, or control of the organisation they are working for suggests that employment status will be aligned, to some extent, with tax law, which is what APSCo has previously called for. However, we are cautious regarding consistency of taxation across all forms of employment.

“As we stressed when we gave evidence during this review, contractors in professional sectors are experts in their respective fields that need to be sourced on a ‘just in time’ basis delivering specific services over a limited period for an agreed price enabling employers to manage budgets and workforce numbers as demand dictates,” she says. “For those who aspire towards more stable employment, these recommendations will no doubt be welcome relief. However, as PwC recently reported, only a third of individuals working in this way do so in place of a secure full time job. For the majority it is a conscious decision.”

One disappointment for APSCo was that the report focuses heavily on the lower-skilled, lower-paid end of the spectrum, rather than looking at modern employment practices more holistically. Hurley complains that there are no explicit recommendations around protecting the economy which is driven by high-skilled, well-paid contractors.

Finally, Julia Kermode, chief executive to the Freelancer & Contractor Services Association claimed to be pleased that Taylor recognised the importance of umbrella firms as a valuable part of the supply chain. “In particular I am pleased that the review has concluded that more should be done on transparency of pay, something that I and FCSA have campaigned for tirelessly in recent years. Compliant umbrella firms are wholly transparent in all of their dealings in the supply chain, and particularly how they calculate pay for their employees, plus they provide a clear contract of employment with all 84 statutory rights and benefits which accompanies employment,” she said. “It is very clear that the review panel appreciates the important contribution of umbrella firms within the supply chain, collecting approximately £3 billion for the Exchequer annually. We also welcome plans for better policing of the umbrella sector, we already rigorously test FCSA Accredited Members for compliance annually and we are continually disappointed by actions of less compliant firms operating dubious schemes that seem to tarnish the whole sector with the same brush.”

Kermode also welcomed the ‘dependent contractor’ employment status and that there was consideration for how the Apprenticeship Levy could be made to work better for those working atypically, including through agencies. “This is good news for umbrella firms and we have repeatedly expressed our concerns to the government on behalf of our members requesting that intermediaries are exempted from the Levy because their payroll is artificially high,” she says. “The Levy has been one more cost to be borne and another tax on a sector that has had more than its fair share of extra burden in recent years so I welcome any review."